GLOSSARY OF SOME INSURANCE TERMINOLOGIES

Insurance
The companies dealing in Insurance Products with uncertainty as to “whether or not” the event will occur e.g. Fire, Burglary, Accident, etc


Assurance
The companies dealing in Insurance Products with uncertainty as to “when” the event will occur e.g. death


Insured
The person whose pecuniary interest is recognised in the policy document property-owner, financier, etc


Sum Insured
The value of insured item being the limit of indemnity


Premium
The amount paid to buy Insurance cover


Indemnity
The process of returning the insured to his financial position immediately before the loss


Subrogation
A principle to ensure that the insured does not make a gain out of his loss


Excess
The amount of a claim that is borne by the insured. The insurer pays all amounts over and above his amount


Salvage
Property recovered by the insurer after they have settled a claim


3rd Party
Anybody apart from the insured and the insurer who in Tort (negligence), Contract, Statute or at Common Law is protected by an insurance contract


Lapse
The termination of an Insurance Contract generally through non-payment of premium or absence of renewal instruction


Proposal Form
The basis of an Insurance Contract to be completed by the proposer


Policy Document
The evidence of an Insurance Contract usually issued by the Insurance Company


Clause
Statements incorporated into the policy document to modify the terms of the contract


Endorsement
Statements incorporated into the policy document to note new developments about the contract


Discharge Voucher
A form of receipt confirming acceptance of the amount offered as full and final discharge of insurer’s obligation under a claim


Risk
Uncertainty concerning loss


Peril
Loss-producing agents e.g. fire, lightning, explosion, riot


Insurable Interest
Evidence of Financial or legal relationship to the property or person to be insured; it is the legal right to insure


Ubberima Fidei
A basic principle in insurance implying an obligation by the insured and insurer to act in utmost good faith; it is a positive duty


Reinsurance
Insurer of Insurance companies


Bancassurance
Insurance Products sold through the banks


Takaful Insurance
Insurance products packaged under the Sharia law specifically to avoid ‘riba’ (interest) and ‘mairsir’ (gaming)


Micro Insurance
Insurance package for the low income group and the rural poor